Consider a $$1,000$ par, $12\%$ annual coupon bond with an embedded call option exercisable any time

$($including immediately$)$ at $105\%$ of par and $2$ years until maturity. Assume the call option will be

exercised if it is at all profitable to do so$.$ Using a two$-$period binomial model with the following

interest rate tree, compute the value of the bond. $(3$ points$)$Consider a $$1,000$ par, $12\%$ annual coupon bond with an embedded call option exercisable any time

$($including immediately$)$ at $105\%$ of par and $2$ years until maturity. Assume the call option will be

exercised if it is at all profitable to do so$.$ Using a two$-$period binomial model with the following

interest rate tree, compute the value of the bond. $(3$ points$)$